If you are a new business owner that will be selling services or selling products in one the states that charge sales tax, you must apply for your sales tax ID number prior to operation of your business. A sales tax number allows you to collect and pay sales taxes to your state’s tax authority. If you fail to obtain a sales tax ID number, your business will be unable to collect taxes, and be at risk for fines and/or other legal actions. Some states use the federal EIN number for their sales tax number. IRS-EIN-Tax-ID offers an online EIN application for business owners of all states.
Employer Identification Number (EIN)
It is important to understand what as EIN is prior to understanding what a sales tax ID number. An EIN is known as Employer Identification Number or Federal Tax Identification Number (FTIN). An EIN is a unique number assigned to your business by the Internal Revenue Service (IRS) for identifying and tax purposes. This number works similar to the way your Social Security number does when paying personal taxes to the federal and state government.
Sales Tax ID Number
A sales tax ID number is issued by the state to provide your business with the ability to charge sales tax. While some states use the FTIN as the sales tax ID number, others issue a separate number from the FTIN.
How to Get a Sales Tax ID Number
If your state requires you to obtain a separate number from an EIN, contact your state’s tax authority. In most states, this number can be applied for online.
However, if your state uses the FTIN as the sales tax ID number, you can easily apply online through the IRS-EIN-Tax-ID website. Whether you need an Employer Identification Number for your business, Estate Tax ID Number for an estate of a deceased loved one, or Trust Tax ID Number you control, the application is fast and simple.